The data shows that the active Bitcoin entities have been increasing steadily, however the growth channel remains bearish.
Bear Market Channel – Number of Active Bitcoin Entities Continually Remains High
According to the most recent weekly Glassnode report, there has been a steady increase in the number of BTC entities that are active.
The “number of active entities” is an indicator that tells us about the number of daily active users on the Bitcoin network.
An entity here refers to a collection of addresses held by a single investor, so the number of entities isn’t the same as the total number of addresses on the network.
This indicator’s value rises means that more traders are trading right now. An increase in the value of this indicator can indicate that a lot more investors have entered the Bitcoin market.
However, falling metric values indicate that investors are less interested in crypto.
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Here’s a chart showing the trends in active Bitcoin entities for the last several years.
It looks like the metric is showing some growth in recent weeks. Source: Glassnode’s The Week onchain Week 15, 2022| Source: Glassnode's The Week Onchain - Week 15, 2022
The graph above shows that the active Bitcoin entities have been increasing steadily in recent weeks.
However, the value of the metric is still within a range that the report refers to as the “bear market channel.” As the name suggests, the indicator is usually inside this range during bearish periods where a persistent user growth is observed, but nothing too explosive.
On the contrary, during the bull market hype the number of active entities shows an extremely rapid rise. The indicator then crashes sharply towards the top.
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The trend in Bitcoin Active Entities has been a rapid growth, however, it was pointed out that the value at present is still above the lower end of the bearish market channel.
The report does note that an expansion would result in the indicator finally escaping this range. This could be a positive for the coin’s price.
BTC price
At the time of writing, Bitcoin’s price floats around $40.4k, down 14% in the past week. In the past month, crypto has seen a 3% increase in its value.
Below is a chart showing the trends in coin price over the last five days.
Bitcoin appears to have fallen in the past few days. Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Unsplash.com featured image, Charts from TradingView.com and Glassnode.com charts